Windows Movie maker only captures to Streaming WMV format which is a Highly Commpressed format But as far as Quality goes it isn"t really very good, But at low resolution and viewing it on a Small laptop screen I guess it would be OK..If you are going to Use WMV format to capture to Don"t use Movie maker It is a Pretty Low Grade Program I guess that is why Microsoft Gives it away for nothing, Microsoft also Gives away "Windows Media Encoder" for free and it is a MUCH better WMV Capture program But it doesn"t have any editing features But if you are doing Movies from start to finnish you really don"t need any editing..As for Capture devices I guess you sort of have to go USB Because a lap top doisn"t have that much room inside for a Capture Capd..Go here:
http://www.tigerdirect.com/applications/Category/category_slc.asp?Id=2806 Some Good Usb devices are there, from pretty Cheap Low resolution Capture devices to to High Resolution capture devices capible of captureing DVD Resolution files ..The higher the resolution the better the Quality But you need a Fairly Fast CPU to capture WMV at high resoltions and Frame rates..And you should use the Highest Bitrate possible to get the best Quality But it will meen Higher File siZes..I have had WMV Captures that were as Big as some Mpeg captures, I guess that is Cuz WMV only gets to a Certain Quality ....anyway I hope this helps a bit....Good Luck...